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Quick Edit | A tough year ahead

Quick Edit | A tough year ahead
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First Published: Wed, Jan 26 2011. 11 29 PM IST
Updated: Wed, Jan 26 2011. 11 29 PM IST
The consensus can often be misleading.
Investors in emerging markets have once again been reminded of this harsh truth. There was almost unanimity in the financial markets that the monetary blast in the US—aka QE2—would send waves of money into markets such as India.
In fact, capital flows to emerging markets (EMs) have slowed, as the International Monetary Fund noted in its latest economic report released on Wednesday.
EMs have become less attractive in recent months, and India particularly so. The year ahead promises to be tough. Consumer and investment spending is up against higher interest rates. Government spending could be under pressure given the need to cut the fiscal deficit.
The new survey of fund managers released on Wednesday by Morgan Stanley shows that only a quarter believe India will outperform the EMs in 2011. Lazy bullishness is always a risk.
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First Published: Wed, Jan 26 2011. 11 29 PM IST